June 3,2012
‘Nor Mohamad the Main Culprit Behind Forex Scandal’
An ex-Bank Negara insider reveals the inside track on the currency speculation undertaken by Nor Mohamed Yakcop and other powerful people about 20 years ago.
A former Bank Negara insider has named four powerful elites as main players to have caused the central bank’s massive RM30-billion loss in the international foreign exchange speculation scandal some 20 years ago.
In his explosive revelation, retired Bank Negara Deputy Manager, Dr Rosli Yaakop named former Prime Minister Dr Mahathir Mohamed, ex-Finance Minister Daim Zainuddin, ex-Bank Negara Governor, the late Jaffar Hussein and current Minister in Prime Minister’s Department in charge of Economic Planning Unit Government Nor Mohamed Yakcop as the “forex scandal elite club masters.”
Rosli told a forum here yesterday Jaffar and Nor were biggest culprits by going overboard in the speculative foreign currency venture.He said the duo speculated and they gambled recklessly and irresponsibly with no regard to the safety of Bank Negara’s assets.
He revealed that they wanted to beat George Soros, perhaps, to impress their bosses that they were experts in forex dealings.
The former high ranking Bank Negara officer said the forex speculation activities were against the very grain of central bank principles.He asked on how a central bank can be heavily involved in massive forex speculations when its task was to stamp out excessive speculations?
“Bank Negara’s duty was to protect and strengthen the value of ringgit, not to gamble ringgit in forex market.I think it was a deliberate attempt to make money for certain people using Bank Negara as piggy ride,” Rosli hammered home his conclusion during a question-answer session later.
He accused Nor to have directly caused the forex losses given that the Tasek Gelugor MP was the man tasked to speculate, and ultimately gamble, Malaysian Ringgit against foreign currencies.
He said Nor, then Bank Negara advisor in charge of Investment Department, would use his computer and other staff computers to speculate and gamble in foreign exchange market.
This has led international forex players to believe that Bank Negara had many aggressive market traders.
“But truth is it was Nor Yakcop did it all,” Rosli told the forum titled: “Bank Negara Forex Scandal – When Government Becomes Speculator.”
With ex-banker Julian Candiah as moderator, Rosli and Opposition Leader and former Finance Minister Anwar Ibrahim were two panelists at the full house forum held at a meeting room in Dewan Sri Pinang.
Organised by state government think tank, Penang Institute, Chief Minister and DAP secretary general Lim Guan Eng delivered an opening speech.
Also present were Penang Institute chief executive officer Zairil Khir Johari and state PKR leaders Law Choo Kiang and Abdul Malek Kassim.
‘Yes Man’ Governor
Rosli said the central bank ventured into speculative forex market in a big way during Daim’s tenure as Finance Minister.
“The order to go and make money in the forex market was from Daim with Dr Mahathir’s blessing,” Rosli disclosed, adding that Jaffar was their “Yes Man” Governor at that time.
He said Bank Negara strategy was to hit a currency for a couple of yards and once the initial transaction has gone through, re-hit it again with another couple of yards normally only minutes later.
This will send shocks to the market and dealers will scramble to buy the currency, sending the currency value up.
Bank Negara would then sell the currency with a healthy profit.“But then, dealers caught on to the scheme hit back,” said Rosli.
In 1992, he said Bank Negara gambled on the British Pound. It bought the
Pound long and George Soros, major player in forex market, short. When the Pound was devalued, Bank Negara lost USD5.5 billion and George Soros gained USD1.7 billion.
Bank Negara then claimed it was only paper loss of RM9.3 billion.Rosli said experts estimated Bank Negara’s exposure for having lost that much was USD27 to USD33 billion, which was five times more than its foreign reserves and its entire assets of USD20.7 billion in 1992.
Rosli said that Bank Negara was indeed such a real gambler that Alan Greenspan of the US Federal Reserve warned the central bank to stop its speculative activities. “But it fell into deaf ears and as a result, the bank incurred more losses in 1993,” he said.
Then Opposition Leader Lim Kit Siang estimated Bank Negara lost a colossal RM30 billion. But Bank Negara claimed RM10.1 billion loss in 1992 and RM5.7 billion in 1993.
“Bank Negara claims of losses were schematically understated.Losses were hidden through revaluation of BNM’s gold holding and revaluation of quoted investment,” disclosed Rosli.
Bank Negara was once the largest player in the international currency market and in April 1991, Reuter described it as “a dominant force in the foreign exchange scene for some years.”
Rosli said that reasonable profits made before 1992 – 93 was the impetus incentive for Bank Negara to gamble in forex in a major way.
Although the market norm was to trade in lots of USD1million, USD5 million or USD10 million, he said Bank Negara would trade in USD50 million-lot and USD1 billion-yard a day.
He said Bank Negara would trade up to between five and 10 lots per call and sometimes, a few yards a day.
“That’s real gambling … even closest rival, Japanese Fund Managers, would trade in USD50 million-lot only once or twice a year,” said Rosli.
Anwar’s ordeal
He said when Anwar took over the Finance Ministry in 1991, with it the burden of forex losses, everything had gone sour.“He could only stop further bleeding which he did,” narrated Rosli on Anwar’s ordeal.
Anwar later explained he could only do damage control and some public relations exercise to save the government from further embarrassment.
The Pakatan Rakyat de facto leader said the finance minister and the Cabinet then did not have a clue about the scandal as there were no documents or reports tabled about it.
He said he took initiative to investigate the scandal after being tipped off by Zurich-based journalist friend.Until then all Anwar knew was that the Bank Negara was only protecting the ringgit in forex market. Subsequently he took some bold cleaning up decisions after he probed into the bottom of the scandal.
Nor was forced to resign from Bank Negara on July 10, 1994, which Rosli
described as a grossly insufficient punishment for such a big a crime he committed against the nation.
Anwar said the deal was that Nor shall never be involved with Bank Negara again.But, in 1997, Rosli said Nor was ‘rewarded’ when he returned to Bank Negara to handle the ringgit crisis.
Jaffar, who died in 1998, was also forced to resign in April 1994. But Rosli said he was also ‘rewarded’ with the appointment of PNB deputy chairman.
He said the masters were Mahathir and Daim, while Jaffar and Nor was given the dirty job to gamble. He said this was the reason why Jaffar and Nor were left scot-free and rewarded later, and no independent investigation held on the scandal.
Kit Siang’s suggestion for a royal commission of inquiry was ignored and Jaffar even did not bother to attend public accounts committee inquiry.
Due to involvement of people high-up, Rosli said an open investigation would prove politically disastrous as details of the scandal can gruesome and cause damaging embarrassment to the-powers-that –be.
He suggested that Pakatan Rakyat, if were to capture Putrajaya, should re-open investigation on the scandal which was approved by the audience.
He said certain people would have been in jail as criminal elements existed in the forex scandal.
He said the criminal elements were negligence, overstepping of power, falsification of accounts, “creative accounting”, misinformation, breach of trust and corruption.“But, they had protectors,” he said.
Din Merican: the Malaysian DJ Blogger 
” Rosli Yacob, in his presentation yesterday , held that losses suffered were closer to a stupefying RM 30 billion “. – article above .
And to think that those who are guilty are still ministers and sitting in the cabinet is unbelievable.
This story, Dato Din, clearly demonstrated to us the need for a two-party syatem government with strong check-and-balance in place to prevent abuse and mismanagement of the country’s wealth – or whatever that is left….
Good! Open this up to refresh Malaysians who are still ignorant about how great this Kutty fella. Ignorant Malaysians must ask the question whether they are still weak in gasping the truth about the massive blunders & corruptions going on till today.
Good! Open this up to refresh Malaysians who are still ignorant about how great this Kutty fella. Ignorant Malaysians must ask the question whether they are still weak in gasping the truth about the massive blunders & corruptions going on till today.-Cina Kedah
Not good enough!!! Revelations such as this should be made into a VCD/DVD and distributed by the thousands to the pak cik and mak cik in the kampungs to be accompanied by pamphlets in Bahasa.
No point telling all these things to Malaysians in seminars, ceramahs and on the internet. Waste of time.
Leave behind leaflets on these scandals in their mailboxes and under their doorsteps or on the tangga.
It should read ‘Who’s really accountable’ or ‘Who Is Really Accountable.’
One key question is how is it possible for the chief casino specialist to now become Minister in PM’s Dept in charge of Economic Plundering Unit?
The punishment for losing $30 billion of taxpayers money is promotion as Minister? BUMNO/BN stands crime and punishment on its head! How pathetic. But then again, promoting endemic corruption is part of BUMNO/BN culture!
Dpp
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Do, correction made to title. Thanks.–Din Merican
This Umno Barisan government is made up of nothing more than corrupt thieves. And it has been like this for too long.
Stop appointing accountants to policy making and Management positions. Why? Like doctors they know how to cover their tracks and present a rosy picture as and when required. Civil Servants too are very well trained to paint a rosy picture if and when you want it. The Treasury, The Accountant General and The Auditor General are key watchdogs in the building of any stable economy and all of us know it but we do not say anything when transgressions happen or are forced or bribed into silence. Constitutional office holders must be reminded that, yes, you are appointed by the Government of the day. But once you take the Oath of Office you have a higher loyalty to the state. This chain of command has been broken and it should be fixed before we do anything else. And I agree with Dato’ Din if we cannot do that it no use setting up any investigating body of Commissions.
Wonder the figures given by the govt. as to our current foreign exchange reserves are really true, or just cooked up figures . Only a change of government at the federal level can verify this. Do not be surprised that RM 1,000 would be worth US $ 100, a couple of years down the line , at the rate things are going !! Stash your loot in foreign currencies overseas folks, if you have the liquidity/cash i.e. !!
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Bank Negara reserves are monitored by the IMF so there is no danger of cooking up those figures. I respect Bank Negara for ensuring the integrity of its finances. It cannot undermine public confidence and trust. Remember, Bank Negara is the issuer of the ringgit and must have reserves to back up that currency. No government is foolhardy enough to play around with the reserves figure.–Din Merican
Dato Din, I have been reading your blog for the past 2 years already, and this is the 1st time, I am posting a comment.
I can bearly follow your articles if they pertained to local issues, but your articles on international economics, philosophy and politics, are often beyond my simple mind. But please don’t change your style or format just because of people like me.
We must REACH UP to people like you, and all your esteem commentators in your blog here, in order to open our minds and improve ourselves.The question I wish to ask today is : IF THAT RM30 BILLION LOST IS DISTRIBUTED TO 30 MILLION MALAYSIAN TODAY ( THAT IS, EVERY MAN, WOMAN AND CHILD IN MALAYSIA), HOW MUCH WOULD EACH ONE GETS ?
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Despite all these kinds of losses, we are still in one piece because of oil. But for how long can our nation be pillaged by irresponsible and corrupt leaders? Another 2 decades at best; we must wake up and act to make change possible before it is too late.
Rm30 billion (in 1992), compound that at 5 per cent, is a huge amount of money and you know the answer (30billion divided by 27million). What is shocking is the attitude taken by the incumbent government about this and other issues involving corruption and abuses of power. It is the culture of impunity that worries my friends and I on this blog.–Din Merican
malaysia is ‘peaceful’ because there is still enough money to go around to satisfy the greed of the ruling elites. one rank lower there are enough jobs in gov. sectors to placate the lives of the civil servants, military, FRU and the likes. there are still enough gov. projects to sweeten the lives of the cronies of government, of MCA, MIC and other parties.
the towkays in the private sector get enough projects from the gov. cronies to make their lives worth living. etc & etc.
this is the silent majority that lends malaysia its famous peace and stability.
therefore this silent majority will never want a change and presumably they are big enough to keep the ‘plague called umno/bn’ forever in power.
what about the poor and unfortunate? haven’t their misery reached a unbearable state where they have to take to the streets like in the Arab countries?
No matter how you slice and dice it, the Governor ( a non-politician) for being the one man who could have stood up to Mahathir but did not should be second in line for the hangman’s noose. The only way to get to the truth of what happened is to offer immunity from prosecution in return for his role as a Crown witness.
Nobody likes plea bargaining but it is a necessary tool and in most cases it is the only tool left. It is both good and bad that in Malaysia there are no statute of limitations for crimes. Over here it is one, two, three, four, six, ten and twenty years depending on the offences.
But i am sure Mahathir will blame Abdullah Badawi for this too.
“He said the criminal elements were negligence, overstepping of power, falsification of accounts, “creative accounting”, misinformation, breach of trust and corruption.“But, they had protectors,” Anwar Ibrahim
You forgot conspiracy. And conspiracy (i.e. the agreement to commit crimes the subject matter of the conspiracy) is a crime by itself and does not disappear with the completion of the crimes. It does not merge unlike the crime of solicitation which merges into the conspiracy.
So it is down to this shorty Nor Mohamad. It has been a while. Documents have long gone to the shredder. What is left are memories which are fast fading along with the witnesses. Which is why we have the different statutes of limitations for the different types of crimes.
But then Nor Mohammad is only the point man. We want Mahathir and Daim. They are the generals who gave the command.
But memories are not about to fade, when submarines are not supposed to do what they are supposed to do is which is submerge ! Time to sue the French government for breach of warranty and merchantibility.
“…the Governor ( a non-politician) for being the one man who could have stood up to Mahathir…” Mr Bean
As far as I know only former BN Governor to stand up to Mahathir wasTan Sri Aziz Taha . This man of integrity is from a religious upbringing.
The governors are all “Yes Man” governors. They even lie to the people about our economy.
ooops … not doing what they (submarines) are supposed to do
Correction “The other governors were all “Yes Man” governors. They even lied to the people about our economy.”
Anwar Ibrahim must have been privy to a lot of the information, which he is keeping to himself.
This is only one debacle from Tun Mahathirs 22 years . There is so many more .
But yet what is surprising is the fact that after all these debacles , they still want to list FELDA Global and risk the livelihood and future of 300,000 families.
Like someone above said ,they ( especially Mahathir ) will blame all their failures on Abdullah Badawi – the fall guy for everything that has gone wrong with UMNO Barisan.
Mamak Madir was the main culprit , those familiar with this devious crime new it all along , only inch details were elusive up till this latest revelation … What are the correct options other than dragging those responsible to justice… They say , the long arms of the law will catch-up with wrongdoers no matter what or how long it takes… If we ever come to this , get them prosecuted and if proven guilty , send mamak madir/cohorts the way of Mubarak , i say…
with hindsight esp after things go badly wrong, it is easy to lay blame…..but at that time mahathir wanted to prove that we could best the best traders in the world…….who would fix prices of currencies and commodities according to their rules usually to the disadvantage of commodity producers and the third world…….in the case of the british pound losses, it was the uk central bank that blinked and devalued after insisting that that would never happen……..
isn’t the timing of the release of this news now a little political and as mr bean says anwar must know all of this and more……
How can you bring these people to justice when the investigators (Police and MACC) are ill equipped, untrained in forensic accounting and the prosecutors have only third class law degree. The defense team will make mince meat out of them and they’ll join the burger sellers and butt men demonstrating in front of Ambiga’s house.
How many major corruption and misuse and abuse of power have been successfullyu prosecuted and culprits sent to jail? Don’t counth those that are politically motivated.
jayz,
Better late then never lah.
“A little political?”
What’s so little about this? Is there a statute of limitations for FUBARs like these? Of course it’s political! It’s to dredge out all those rotting, putrefying and malodorous corpses, before they become additional pristine skeletons in the UMNO’s closet. After all U$D30 bil ain’t no great shakes for any sovereign nation. Ask Malawi…
Should the Opposition win, the reek will be so pungent that it’ll take our breath away. Asphyxiate, maybe not, but retching is certain. Maybe it’s better to let sleeping dogs lie.
That’s right. Many of those involved in one way or another are his friends. We would like to know what he knows and how much he knows – and did not do anything to stop. I’d give anything to be that fly on the wall when he talks about it with his wife.
“The other governors were all “Yes Man” governors. They (including Tun Ismail) even lied to the people about our economy.” Sam01
The only governor that had the integrity of a Central Banker and the courage to stand up to the politicians was Tun Ismail. He had a very sharp mind and very stern looking – a no nonsense guy. BNM lost its independence which Tun Ismail worked hard to defend and protect and began that slide down the proverbial slipperty slope beginning with Aziz Taha, the affable looking Australian trained Chartered Accountant. Would Tun Ismail have handled the BMF scandal differently? You bet.
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On Aziz Taha, you, Bean, got it wrong. He resigned because he disagreed with Mahathir and Daim on many issues. He was tough and uncompromising when it came to Bank Negara’s independence on monetary policy.–Din Merican
“This man of integrity is from a religious upbringing” Sam01
You dangle a few bundles of RM100 notes in front of so-called ‘man of integrity with religious background’ he not only would throw his most trusted aide under the bus but would sell his grandmother for a few ringgit more.
Guys,
Try to read this book written by Wong Sulong in the form of notes from Nor Yaakop to Kutty, In this book Yaakop is trying to portray himself as a hero when Malaysia imposed currency control in 1998.
Well, he must be feeling guilty. The lost in Forex in 1992 will surely haunted him until his last breath.
This is the book;
“Notes to the Prime Minister: The Untold Story of How Malaysia Beat the Currency Speculators” by Sulong, Wong
And if you want look at the losses of Bank Negara and the stupid actions of Bank Negara Malaysia from Soros’s perspective read his book, Soros on Soros.
Only in Malaysia we still have thieves sitting there in Putrajaya. If this happen in China his family should pay for bullets.
Mongkut
Hang jangan muntah no! here is the synopsis,
http://www.mphonline.com/books/nsearchdetails.aspx?&pcode=9789675997426
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Nor Mohamed wanted to show that he was the forex expert, forgetting that in 1992, he lost billions speculating on sterling which paid 14% per annum at that time. Bank Negara was known to be a rogue currency trader playing forex markets. Greenspan warned Bank Negara. This book is not original. He must have used other books for his purpose without acknowledging them. Mahathir was impressed and that was enough.–Din Merican
And why is that shorty still heading up EPU and for a long time MoF II? Could he have been planted there to look after the shredder machine all these years at the behest of his ex-boss the great helmsman of 22 years? And we still have people kissing the old man’s hands on TV every nite… And where are you Mak Chik and Adam Abdullah?
simply they don’t have the right to speculate with taxpayers money. the fact is, if they had won big that money would have gone into private pockets and we wouldn’t have heard of it. but NO, they lost therefore it was just a misadventure, case closed and rakyat pays, how convenient.
why now the Forex scandal surfaces, stupid question isn’ it? because UMNO is digging forever into the past of Anwar after digging into his After(asshole) for ten years, so why not investigate the greater evil. Mahathir?
RM30bil down the drain and the creep who caused it is still calling the shots in malaysian politics. those people who support these bums and still vote for dumbo-bn are best served in a sado-maso club. I bring my own club please clobber me.
Where’s Makcik and Adam Abdullah?? Our Dato must have banned them.
He was tough and uncompromising when it came to Bank Negara’s independence on monetary policy.–Din Merican
If you are tough and uncompromising, you don’t resign. You stand your ground.
Bank Negara was known to be a rogue currency trader playing forex markets — Din Merican
“A currency trader?” That is never the role of any Central Bank.
Hmmm … I remember that the Philippine Govt during the Ferdinand Marcos era reported false financial data (such as foreign exchange reserves) to the IMF
Where are Mak Cik and Adam Abdullah? Well, after Din placed a caveat of free posting these two Umno cybertroopers are history. Good on you, Din. You need to weed out the undesirables.
… but the money lost was UMNO’s and my money. You rakyat do not have a say in how this money was spent because you do not know how to spend money wisely. Malaysia’s money is UMNO and my money! Besides, you rakyat should be thankful to me and UMNO for all the development that we have brought to you. Without UMNO and me, you will still be living in the jungle being subservient to the Mat Sallehs. So don’t be ungrateful to UMNO and I who have selflessly served the rakyat for so many years. – Mahathir
Tok Cik,
That’s the soldier in you talking. But you’re now a civilian. True. We do not want our soldiers fighting for King and country to be asking in the heat of battle, “Should I kill the guy, should I not?” But we should be practicing what we preach. Now old Frank has nobody to pick his fight with since all the Melayu on this blog are now ‘bukan Melayu bodoh, bukan bodoh sombong dan bukan pondan”.
That’s also the reason why I think in terms of freedom of speech, a Pakatan government will not be much different down the road when it comes to freedom of speech, assembly and association.
On a lighter note. Where’s the fun in hearing the echoes of your own thoughts. We need the likes of Makcik, Adam Abdullah and Ilham if only to affirm our own beliefs and convictions that we are moving in the right direction and they are not . These are UMNO’s footsoldiers. They are not going to go away just because a new government takes over. We need to know what makes them tick and expose them for what they are.wherever and whenever we find them. They are a self serving lot.
Pakatan have their own. We saw some of the same when Tunku Aziz chose to exercise his right to free speech over a key issue and walked out of the door in a huff. Tunku Aziz took more than a dressing down for his actions on this blog. Even the bloghost who would normally come to the aid of his old friend was forced to let him roll under the bus.
If this country were to stand a chance at one day emerging into a full democracy, then it is fundamentally important that we understand the importance of free speech for its own sake. None of the “in the interest of security” bull shit that we hear today.
Either that or we can all kiss goodbye to democracy. Instead call it by whatever name you want but democracy is not one of them.
But again I am afraid that when the case does come up there will be no witnesses beacuse all of us would be classified as accomplices by the courts because we knew about it and did nothing.When you are in power you can spin it anyway you like.
In India the fight against corruption brought on recently by a citizen who wanted to fast unto death the Prime Minster was quoted as having said, we are a Plaliamentary democracy and how can we allow one man to dictate to us how we should fight corruption or words to that effect. We have to get to the cause and allow the effects to be taken up by historians.
“But again I am afraid that when the case does come up there will be no witnesses beacuse all of us would be classified as accomplices by the courts because we knew about it and did nothing” — Anon
What are you talking about?? The only qualification for being a witness is that you have in your possession information relevant to any of the issues. Being the accused you may want to plead the Fifth as we say over here or not take the stand at all on your behalf (referring to the U.S. Constitution ) but over there, you can rely on the English common law right not to incriminate yourself while giving testimony in court. All other witnesses can be made to answer questions asked, again short of incriminating himself or herself. But can he or she refuse to testify? No. A subpoena will be issued forcing you to appear in court to testify as to what you know and if you don’t a warrant of arrest will be issued against you.
The only qualification for being a witness is that you understand the oath and you have relevant information to give.
Yeah Ok blame the kote mamak. Where were you guys when he not only put his hand in the cookie jar but his kote??
No please…not the late Jaffar Hussein, who was then Governor of BN, he was full-time paid Servant of the Crown…..and the few scoundrels who weild political powers, could EASILY have mauled him to bits…like what happened to Ani Arope of TNB, for standing up to the preditors…..
Ehhh….what’s this about preditors & prey by the way ? Yea…. when we observe the drama of life for Survival, …. the pack of hyenas could virtually run down and maul even the biggest of the big-cat family, the Lion or the Tiger…..so king of the jungle has to quietly retreat with humilation & lick their wounds in silence…..
But the Amazing thing was, NOBODY ever dared with Tun Ismail Ali when he was there – is’nt that a paradox ?
Be End have gotten to much dirt, and they will fight tooth and nail to hold on to power, and by the thugs they engaged to disrupt the oppositions rally, one could hardly feel comfortable with the coming GE. The Mkutty is dead worried also, and he will try all ways to help uno to stir up trouble, through a 3rd hand.
I am a simple person and call for simple measures to end these plundering. Hanging nooses for ex Prime Minister Dr Mahathir Mohamed, ex-Finance Minister Daim Zainuddin, ex-Bank Negara Governor, the late Jaffar Hussein and current Minister in Prime Minister’s Department in charge of Economic Planning Unit Government Nor Mohamed Yakcop should be enough to satisfy my sense of justice but as long as BN remains in power, they will thumb their noses at us but the Almighty will be able to wield justice on them . We will wait and see.
Good day! This is kind of off topic but I need some advice from
an established blog. Is it hard to set up your own blog?
I’m not very techincal but I can figure things out pretty fast. I’m thinking about creating my own
but I’m not sure where to start. Do you have any ideas or suggestions? Thanks
The world of finance is very intransparent and especially the forex market moves a huge amount of money.
I like the valuable information you provide in your articles.
I will bookmark your blog and check again here regularly.
I’m quite sure I will learn many new stuff right here! Best of luck for the next!